What happens to the rights and licenses granted to a Crawlspace Medic developer upon termination or expiration of the Development Agreement?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
ade within the Territory. Franchisor also reserves the right to acquire, be acquired by or merge with another company. Franchisee agrees that such implementation of Franchisor's rights pursuant to this Section 2.2 is deemed not to impair or injure Franchisee's rights pursuant to Section 2 hereof.
- 2.3 No License to System and Marks. Developer expressly acknowledges that this Agreement is not a Franchise Agreement and does not grant to Developer any right or license to operate a Crawlspace Medic outlet, distribute any product or service, or use the Marks. This Agreement sets forth conditions which, if fully satisfied, confer upon Developer the rights to enter a Franchise Agreement with Franchisor to establish one or more Crawlspace Medic outlets in the Development Area only. Developer's rights to open and operate a Crawlspace Medic outlet and use the System and Marks shall be derived only through the execution of a Franchise Agreement for each Crawlspace Medic outlet to be established in the Development Area.
- 3 TERM. Unless sooner terminated in accordance with this Agreement, the term of this Agreement and all rights granted by Franchisor under this Agreement shall expire on the date on which Developer successfully and in a timely manner has complied with all of Developer's obligations hereunder and has completed the development obligations in accordance with the Development Schedule.
4 DEVELOPMENT AND FRANCHISE FEES.
4.1 Multi-Unit Development Fee.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to the 2024 Crawlspace Medic Franchise Disclosure Document, the Development Agreement outlines the terms and conditions for developers. The agreement specifies that it does not grant the developer any rights or licenses to operate a Crawlspace Medic outlet, distribute products or services, or use the brand's marks. These rights are only obtained through a separate Franchise Agreement for each outlet. The development agreement grants the developer the rights to enter into a Franchise Agreement with Crawlspace Medic to establish one or more outlets in a specific Development Area, provided they meet all the conditions outlined in the agreement.
Upon the expiration or termination of the Development Agreement, all rights granted by Crawlspace Medic to the developer under the agreement cease. Specifically, the term of the Development Agreement, including all rights granted by Crawlspace Medic, expires when the developer has successfully fulfilled all obligations and completed the development obligations according to the specified Development Schedule. This means that if the developer fails to meet the development schedule or if the agreement is terminated early due to a default, the developer loses the rights to open and operate Crawlspace Medic outlets in the Development Area.
Furthermore, even after the agreement's expiration or termination, the developer is subject to certain non-competition covenants. For a period of twenty-four (24) months following the end of the agreement, the developer is restricted from engaging in any business activities that could divert customers from Crawlspace Medic outlets or compete with the Crawlspace Medic system. This includes restrictions on participating in any crawlspace or basement service business similar to the Crawlspace Medic system. These restrictions are in place to protect Crawlspace Medic's trade secrets, confidential information, and goodwill, which the developer gains access to during the term of the Development Agreement.